The adoption of disruptive technologies in the consumer products industry

Transcription

1 A SHORT ARTICLE SERIES The adoption of disruptive technologies in the consumer products industry Spotlight on digital reality Barb Renner, Curt Fedder, and Jagadish Upadhyaya THE DELOITTE CENTER FOR INDUSTRY INSIGHTS

2 Digital reality applications in the consumer products industry have the potential to create operational efficiencies for companies as well as unique products and buying experiences for consumers. DIGITAL REALITY IS one of the many disruptive technologies that can help build a competitive advantage for consumer products companies. Digital reality comprises newer, innovative technologies (figure 1): augmented reality (AR), virtual reality (VR), mixed reality (MR), 360-degree video, and immersive/spatial technologies. 1 AR, VR, and MR are currently the most widely used applications, while 360-degree video and immersive technologies are in their nascent stages. 2 Digital reality technologies can result in increased operational efficiencies for companies while offering advanced methods for consumers to interact and experience products prior to buying them. Often, digital reality product experiences help consumers make more informed purchase decisions. FIGURE 1 Digital ecosystem of digital reality Augmented reality Overlays digitally created content into the users real-world environment Features include transparent optics and a viewable environment in which users are aware of their surroundings and themselves Virtual reality Creates a fully rendered digital environment that replaces the user s real-world environment Features body- and motion-tracking capabilities DIGITAL REALITY Mixed reality Seamlessly blends users real-world environment and digitally created content in a way that allows both environments to coexist and interact Utilizes advanced sensors for spatial awareness and gesture recognition Source: Allan Cook at al., Tech Trends 2018 Digital reality: The focus shifts from technology to opportunity, Deloitte Insights, December 5,

3 The potential use cases we ve observed for digital reality in the consumer products industry (figure 2) result in several benefits to both companies and consumers. Companies can benefit by: Creating effective marketing and advertising through enhanced brand engagement experience and contextualization of information for their consumers Driving innovation by capturing and analyzing real-time product performance data Improving employee effectiveness while saving costs and time through real-time and inter-active training Increasing efficiency in maintenance and servicing of equipment by virtually engaging the services of an expert 3D and interactive visualization of products, furniture, and vehicles in the consumer s space to help increase sales and to reduce returns FIGURE 2 Possible use cases of digital reality in the consumer products industry Business-centric use cases Marketing and advertising through brand engagement Create an opportunity for brands to virtually engage and advertise the product Maintenance and service Use the services of an expert to virtually service and maintain equipment Product analytics and innovation Capture and analyze real-time data to improve product features and performance of the user In-store design and product placement Simulate product configurations onsite with clients to make more informed decisions about product placement Employee training Host interactive real-time training and product briefings across the globe Cybersecurity Create programs that can detect and eliminate bots and counterfeiters in the e-commerce space Consumer-centric use cases Virtual shopping and product experience An opportunity for consumers to virtually engage, experience, and shop for products Personalized product suggestions Consumers gain customized and personalized product suggestions based on specific requirements Source: Deloitte analysis. Deloitte Insights deloitte.com/insights 3

4 For consumers, the potential benefits of digital reality applications can include: The opportunity to virtually engage with products prior to making a purchase decision, potentially resulting in an enhanced and more satisfying shopping experience as well as dramatically lowering returns Personalized product suggestions that better suit consumers individual requirements Product transparency. As consumers continue to demand more information about the products they use, AR makes it easier for companies to share product instructions, demonstrations, and detail on ingredients or contents. CASE STUDIES MATTEL USES AR TO ALLOW CONSUMERS TO PREVIEW ITS HOT WHEELS PLAYSETS Mattel deploys AR to both attract and allow shoppers to experience its Hot Wheels line to make an informed purchase decision without needing to spend money. Hot Wheels consists of 12 different Hot Wheel City sets ranging in cost from US$10 to US$70. When in stores, consumers can point their smartphones at the toy box to generate a virtual setup of Hot Wheels, allowing them to visualize and experience how the car would traverse through the track. 3 TYSON FOODS RELIES ON VR-BASED SAFETY TRAINING TO REDUCE WORKER INJURIES The food processing industry requires employees to maintain the highest standards of safety and efficiency. To ensure this, employees at food processing units need to undergo rigorous training programs. In 2017, Tyson Foods deployed VR to drive general safety and hazard awareness trainings for its employees with a goal of reducing injuries by 15 percent. Following this training, Tyson experienced a 20 percent reduction in injuries and illnesses of its employees compared to the prior year. 4 4

5 Digital reality applications can help build a company s brand reputation for being innovative Digital reality-based applications are rapidly moving from concept to reality while offering benefits to consumer products companies and their consumers. Companies can improve employee effectiveness, realize increased operational efficiencies, drive innovation, and better communicate with consumers. Consumers can enjoy an enhanced customer experience in all stages of their purchase journey. To build a reputation for being innovative, consumer products companies will likely benefit from reviewing and adapting the use cases we ve identified as well as by developing ones tailored to their organizational needs. As observed in our discussion on artificial intelligence, as consumers become increasingly comfortable with their digital reality experiences, they will likely come to expect and rely on companies to deploy digital reality applications to inform their purchase decisions and provide a more satisfying shopping experience. Endnotes 1. Allan Cook et al., Tech Trends 2018 Digital reality: The focus shifts from technology to opportunity, Deloitte Insights, December 5, Based on Deloitte s analysis of secondary literature. 3. Devindra Hardawar, How Mattel is using AR to let you preview Hot Wheels playsets, Engadget, February 16, Riia O Donnell, Tyson Foods reduces worker injuries, illnesses with VR safety training, Food Dive, September 21,

6 About the authors BARB RENNER is vice chairman and the US Consumer Products leader, Deloitte LLP. She has more than 25 years of professional experience serving large multinational clients through a variety of leadership roles. Renner works directly with consumer and industrial product clients focusing on their regulatory environment, supply chain, technology and processes, and other issues and opportunities. She has also served in key leadership roles with Deloitte s Women s Initiatives and Junior Achievement. She is based in Minneapolis. CURT FEDDER is a senior manager at Deloitte Services LP s Center for Industry Insights and leads market research for consumer products. With expertise in consumer research and a focus on brand equity, customer satisfaction, and advertising, Fedder has led consumer research groups in consumer products and retail organizations. He has published articles in the Journal of Advertising Research and Quirk s Marketing Research Review, and has presented at market research industry conferences. He is based in Chicago, IL. JAGADISH UPADHYAYA is an assistant manager at Deloitte Support Services Center for Industry Insights supporting research for consumer products. He has over 15 years of experience in conceptualizing and designing research projects, project management, and advanced statistical analysis. He has rich experience in writing high-impact thoughtware backed by detailed research and analysis. Upadhyaya has led client-specific multidisciplinary market research teams focusing on analysis of real-time market data and identifying trends in the consumer products and retail space. He is based in Hyderabad, India. Acknowledgments Robert Libbey, manager, Deloitte & Touche LLP Shweta Joshi, senior analyst, Deloitte Support Services India Pvt. Ltd. Timothy Murphy, senior manager, Center for Integrated Research, Deloitte Services LP Kavita Saini, manager, Deloitte Support Services India Pvt. Ltd. 6

7 About the Deloitte Center for Industry Insights The Deloitte Center for Industry Insights is the research division of Deloitte LLP s Consumer and Industrial Products practice. The center s goal is to inform stakeholders across the consumer business and manufacturing ecosystem of critical business issues, including emerging trends, challenges, and opportunities. Using primary research and rigorous analysis, the center provides unique perspectives and seeks to be a trusted source for relevant, timely, and reliable insights. To learn more, visit Contact Barbara L. Renner Partner Deloitte Tax LLP brenner@deloitte.com Deloitte is widely viewed as a leader with demonstrated results around blockchain as a business solution. By collaborating across a highly skilled global ecosystem of strategic and technical professionals, we combine deep industry knowledge across consulting, tax, risk & financial advisory, and audit, with competencies in technology, strategy, and human capital. With three global delivery labs in the Americas, Europe, and Asia, in addition to our dedicated blockchain Centers of Excellence, Deloitte is uniquely positioned to help clients explore every aspect of blockchain for their business to build tailored solutions that deliver value. With the very best in architecture, digital design, and development, we serve our clients in their quest for innovative blockchain solutions that are market ready and address real business issues. 7

8 Sign up for Deloitte Insights updates at Deloitte Insights contributors Editorial: Kavita Saini, Nairita Gangopadhyay, Abrar Khan, and Preetha Devan Creative: Sonya Vasilieff Promotion: Nikita Garia Cover artwork: Mario Wagner About Deloitte Insights Deloitte Insights publishes original articles, reports and periodicals that provide insights for businesses, the public sector and NGOs. Our goal is to draw upon research and experience from throughout our professional services organization, and that of coauthors in academia and business, to advance the conversation on a broad spectrum of topics of interest to executives and government leaders. Deloitte Insights is an imprint of Deloitte Development LLC. About this publication This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or its and their affiliates are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. None of Deloitte Touche Tohmatsu Limited, its member firms, or its and their respective affiliates shall be responsible for any loss whatsoever sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the Deloitte name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright 2019 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited